Negotiating Real Estate
Possibly the most stressful and time-consuming aspect of buying commercial property is the price negotiation process. Though a necessary step, it can be an awkward and uncomfortable situation that leads to frustration on both sides. This is especially true in a community our size where both parties probably know each other fairly well.
It is important to be conscious of the way you negotiate and the impact that your negotiation tactics will have. As a seller or a buyer, the goal is to obtain the best deal for yourself. However, this is a tricky art that is easily muddled in the real estate industry. Avoidable mistakes often cost the offending party and can lead to the entire sale being canceled and bad feelings that last a long time. To avoid this, consider the following approaches:
Ideally, your negotiating style should be firm and fair. Be willing to consider the argument from the other side but stick to your guns. You want to make sure you get a palatable offer, but don’t nickel-and-dime the other party; you may appear cheap and selfish. People will often walk away if they sense you are unwilling to compromise.
In addition, you don’t want to be someone who reneges on your word during your negotiations either. When you agree to do something, stick with it, not only because your reputation is on the line but because it could be detrimental to deals in your future. Resist going back and forth on your agreements because you will lose all credibility. Remember, this is your brand at stake.
When looking out for your best interests, it’s important to be flexible and understand the areas you can give and take. With this in mind, sometimes negotiating can feel like two bulls circling each other, waiting for the right moment to charge. It doesn’t need to be this way. Juxtapose the needs of the other party against yours, communicate well and try to be fair and understanding.
Finally, keep in mind that if the offer is not perfect, you can always walk away. Set a minimum number and stick to it. In negotiation, the stakes can feel high and you want to avoid making emotional decisions. You can walk away at any point.
There are a number of strategies that will make you a better negotiator. Work with real estate professionals who can guide you and act as an intermediary for you. Remember to know your bottom line number and look for the areas in which you can be flexible and reasonable. When you do this, not only will people respect you for your treatment of them, but you’ll be far more likely to maintain a positive relationship. Remember you’ll be seeing these people around town and there may be another deal in your future.